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The Importance of the Minimum Viable Product

July 18, 2022 Funding Resources
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A Minimum Viable Product (MVP) is an early version of a product that is built with only the essential features needed to make use of its core functionality. The concept was introduced by Eric Ries as part of his Lean Startup methodology after his own startup failures using the traditional product development approach.

Traditionally, technologists would create a full product with every possible desirable feature right at the beginning in an attempt to please the largest market possible. What Ries found from his own experience and from watching other entrepreneurs, was that you could spend years developing a really cool, comprehensive product, that upon launch nobody actually wanted to buy. The reason was that you didn’t have any real-world feedback from the market regarding what you were building prior to the launch. And in the meantime, you spent possibly years of your life and hundreds of thousands or millions of dollars on a product that was doomed to fail. Ries realized that you could actually start getting feedback from the market earlier in the process if you built just enough of a product for customers to test and validate. That is the essence of the MVP.

“The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

– Eric Ries

The concept of the MVP has become common knowledge among entrepreneurs, but there’s a difference between knowing what it is and truly being committed to executing it. Many startups still fail because they don’t take a disciplined, customer-validation approach to product development.

How to Build a Minimum Viable Product

Building an MVP is much like applying the scientific method to product development. You’ve identified a problem through your experience or research, formed a hypothesis about how to solve it, and now need to run experiments to test whether your hypothesis is supported by reality. A scientist wouldn’t test their initial hypothesis with some big, elaborate experiment unless it was really necessary. They would do the bare minimum to get the data they need to draw conclusions.

In the same way, the MVP development should be designed to the extent necessary to gather enough data from customers in order to draw initial conclusions about your value proposition hypothesis. In practice, that’s easier said than done, but here’s an overview of the steps to creating an MVP:

  1. Define the Problem: Make sure you truly understand the problem first, and that it’s a big enough pain point in a large enough potential market. Get out and talk to potential customers and really try to get an understanding of the problem at a visceral level.
  1. Create a Solution Hypothesis: Focus strictly on the problem you’ve defined and start to plan a solution that can solve the problem as efficiently as possible.
  1. Identify Core Features vs. Nice-to-Haves: There are multiple established prioritization methods out there you can find including Lean Prioritization, MoSCoW analysis, the RICE method, and the Kano model.
  1. Build-Measure-Learn: A core teaching of the Lean Startup methodology:
    • Build a basic first version of the product with only the core features needed to generate user feedback on the main functionality. Then go out and find potential customers to test the product for you. That might include launching an open beta to maximize your reach and/or targeting early adopter types, as explained in Geoffrey Moore’s must-read Crossing the Chasm.
    • Measure users’ experience and be methodical about getting their feedback and capturing key metrics. While there is feedback software out there like SurveyMonkey and Qualaroo, there are also email and text questionnaire options. Better yet, it may be feasible to talk face-to-face with customers. The key is to balance asking the right questions while also making it easy for users to provide feedback. You also want to track metrics appropriate to your product like usage, session duration, churn, and customer satisfaction metrics like Net Promoter Score.
    • Learn from the data you’ve gathered from this round of user testing to understand what changes you need to make to the product to satisfy your customers. Update your product as needed and begin a new build-measure-learn cycle. And continue to iterate as needed to get to a sellable product.

A Foundation for Product-Market Fit

Again, the goal in developing a Minimum Viable Product is to learn as much as possible about what customers think about your core product using the least amount of effort. It still has to be viable in terms of offering the main functionality. But you might be surprised by how much you can learn and accomplish with a very basic MVP. And using the MVP process sets the tone for your journey in finding Product-Market Fit as you begin to sell your product and scale up to a larger customer base.